returns to higher education – some doubts and alternative views john thompson
TRANSCRIPT
Returns to higher education – some doubts and alternative views
John Thompson
Student choice
• Whether to study
• What to study
• Where to study
Why go to university?
“Universities transform lives - the typical graduate earns £31,000 a year as against £19,000 a year for a non-graduate. “ Willetts
“on average, graduates tend to earn
substantially more than people with A-levels who did not go to university. Projected over a working lifetime, the difference is something like £100,000” – Directgov
Population
• Students at English state schools and colleges
• At least two A-levels or equivalents
• At key stage 5 in 2008
>= 3 A levels
Int Bac 2 A levels
BTEC Dip
BTEC Cert
0%
20%
40%
60%
80%
HENot HE
1201401601802002202402602803003203403600%
4%
8%
12%
HENot HE
Tariff Points
Student choice
• Whether to study
• What to study
• Where to study
Student choice
• Whether to study
• What to study
• Where to study
Earnings differentials for male and female graduates compared to non-graduates with 2+ A-levels
Men 22%
Women 36%
Women - Men 14%
Derived from data presented in Walker and Zhub (2011), ‘Differences by degree’
Earnings differentials for male and female graduates compared to
ALL non-graduates with 2+ A-levels
Men 43%
Women 15%
Women - Men -28%
Derived from data presented in Walker and Zhub (2011), ‘Differences by degree’
Student choice
• Whether to study
• What to study
• Where to study
Student choice
• Whether to study
• What to study
• Where to study
Mis-selling?
Policy development
Policy development
• How many places should be funded?
• Share paid from the public purse?
• Subject subsidy?
Social returns
• Productivity versus sorting
• Impact on others
• Who is affected?
Social returns
• Productivity versus sorting
• Impact on others
• Who is affected?
Social returns
• Productivity versus sorting
• Impact on others
• Who is affected?
From estimates to policy
The cost of student loans
The catch
“You must agree to repay your loan with the regulations at the time the repayments are due and as they are amended”
What should be done?
Those estimating
• Set out all assumptions• Range estimates covering different scenarios• Detailed descriptions• Data extracts and intermediate datasets
Pundits, politicians, policy makers
When advising prospective students:-• Be circumspect
In policy discussions:-• Do not treat approximate and uncertain
estimates as hard facts